I have followed the manual of the FX2N-2AD module, the wire encoder requires the current input from 4-20mA, and I am getting a digital output, but this needs to be converted to show in millimeters on the HMI. Unfortunately I am only learning how to do this, and am not an expert in Mitsubishi PLCs (yet).
All you have to do is give it an offset and Gain. You can do this is the PLC but as this is for displaying it on the HMI.
You should also have this function in the HMI. Are you using a Mitsubishi GOT ?
What is the range of the Digital value vs mm